SEGMENTS

Refinery Operations

Our refinery segment operates for the benefit of the airline segment by providing jet fuel to the airline segment from its own production and through jet fuel obtained through agreements with third parties. The refinery's production consists of jet fuel, as well as gasoline, diesel and other refined products ("non-jet fuel products"). We use several counterparties to exchange the non-jet fuel products produced by the refinery for jet fuel consumed in our airline operations. The gross fair value of the products exchanged under these agreements during the three months ended March 31, 2016 and 2015 was $526 million and $782 million, respectively.

Segment Reporting

Segment results are prepared based on our internal accounting methods described below, with reconciliations to consolidated amounts in accordance with GAAP. Our segments are not designed to measure operating income or loss directly related to the products and services included in each segment on a stand-alone basis.



(in millions)	Airline		Refinery			Intersegment Sales/Other				Consolidated
Three Months Ended March 31, 2016
Operating revenue:	$	9,172	$	765						$	9,251
Sales to airline segment						$	(144	)	⁽¹⁾
Exchanged products						(526		)	⁽²⁾
Sales of refined products to third parties						(16		)	⁽³⁾
Operating income⁽⁴⁾	1,568		(28		)	—				1,540
Interest expense, net	107		—			—				107
Depreciation and amortization	477		9			—				486
Total assets, end of period	52,093		1,249			—				53,342
Capital expenditures	858		13			—				871

Three Months Ended March 31, 2015
Operating revenue:	$	9,314	$	1,140						$	9,388
Sales to airline segment						$	(233	)	⁽¹⁾
Exchanged products						(782		)	⁽²⁾
Sales of refined products to third parties						(51		)	⁽³⁾
Operating income⁽⁴⁾	1,312		86			—				1,398
Interest expense, net	131		—			—				131
Depreciation and amortization	463		7			—				470
Total assets, end of period	52,587		1,056			—				53,643
Capital expenditures	579		7			—				586


⁽¹⁾	Represents transfers, valued on a market price basis, from the refinery to the airline segment for use in airline operations. We determine market price by reference to the market index for the primary delivery location, which is New York Harbor, for jet fuel from the refinery.


⁽²⁾	Represents value of products delivered under our exchange agreements, as discussed above, determined on a market price basis.


⁽³⁾	Represents sales of refined products to third parties. These sales were at or near cost; accordingly, the margin on these sales is de minimis.


⁽⁴⁾	Includes the impact of pricing arrangements between the airline and refinery segments with respect to the refinery's inventory price risk.